BOC Governor Mark Carney has made some comments on the Canadian housing market being overheated lately. The first paragraph of this Vancouver Sun article sounds kind of familiar:
The Canadian housing market is overheated, but everything is in place for it to moderate naturally with no further need for government intervention, according to the governor of the Bank of Canada.
It was Patriotz that pointed out this Washington Post article from 2005:
Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.
Of course where those two articles differ is the comment on local markets. Bernanke specifically did not address local market bubbles, where Carney calls them out specifically:
“Given such developments, one cannot totally discount the possibility that some pockets of the Canadian housing market are taking on characteristics of financial asset markets, where expectations can dominate underlying forces of supply and demand,” Carney’s notes say. “The risk is that expectations become extrapolative, prompting the classic market emotions of greed and fear – greed among speculators and investors – and fear among households that getting a foot on the property ladder is a now-or-never proposition.”
But monetary policy is Canada-wide, Carney said.
“We can’t manage monetary policy for a specific housing market or specific province. We’ve got to manage it for the country as a whole to achieve the inflation targets.”
